(The Canadian Press)

(The Canadian Press)

Pembina buying Kinder Morgan Canada and U.S. portion of Cochin pipeline

The deal also includes an Edmonton storage and terminal business and Vancouver Wharves

Shares in Pembina Pipeline Corp. drifted lower Wednesday morning after it announced it would buy Kinder Morgan Canada Ltd. and the U.S. portion of the Cochin pipeline system in deals it valued at a total of about $4.35 billion.

Pembina traded down as much as 1.8 per cent or 90 cents from Tuesday’s close while Kinder Morgan rose by as much as 35 per cent or $3.86 on the Toronto Stock Exchange.

The companies estimated the Pembina offer for Kinder Morgan represented a 38 per cent premium to its Tuesday close.

“This acquisition is highly strategic for Pembina, providing enhanced integration with our existing franchise, entrance into exciting new businesses and clear visibility to creating long-term value for our shareholders,” said Pembina CEO Mick Dilger in a news release.

“It represents an ideal opportunity to continue building on our low-risk, long-term, fee-for-service business model while extending our reach into the U.S. through a highly desirable cross-border pipeline.”

The Cochin pipeline owned in partnership by Kinder Morgan Canada and its American parent, Kinder Morgan Inc., runs 2,900 kilometres between Fort Saskatchewan, northeast of Edmonton, and Chicago and has a design capacity of up to 110,000 barrels per day.

It imports into Canada a prized light petroleum called condensate which is used to dilute oilsands bitumen to allow it to flow in a pipeline.

The deal also includes an Edmonton storage and terminal business and Vancouver Wharves, a bulk storage and export-import business.

“We believe KML’s assets will be a great fit with Pembina’s business and this transaction is highly beneficial to KML’s shareholders,” said Steve Kean, CEO of both Kinder Morgan Canada and its 70 per cent owner, U.S.-based Kinder Morgan, Inc.

“This transaction gives KML’s public shareholders the opportunity to participate in a larger and growing platform of North American midstream energy assets.”

Pembina is offering 0.3068 of a Pembina share per Kinder Morgan Canada share and class B unit. The acquisition is valued at approximately $2.3 billion including the assumption of Kinder Morgan Canada’s preferred shares and outstanding net debt.

In addition, Pembina is paying roughly $2.05 billion in cash for Kinder Morgan Cochin LLC, which holds Cochin US.

Kinder Morgan Canada was spun off from its American parent in mid-2017 to raise money to build the Trans Mountain pipeline expansion but it sold the pipeline and its expansion project to the federal government for $4.5 billion last summer.

It announced in May it had decided to remain a stand-alone public company after a strategic review of options that could have included the sale of part or all of the corporation.

ALSO READ: Trans Mountain gives contractors 30 days to get workers, supplies ready for pipeline

The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Two-year-old Kashius Weme rides at the Steve Smith Memorial Bike Park in Nanaimo on Tuesday, May 11. The youngster’s precocious bike-riding ability is already attracting cycle sponsors. (Chris Bush/News Bulletin)
2-year-old Nanaimo bike rider already attracting cycle sponsors

Kashius Weme has a knack for extreme cycle sports

A Nanaimo RCMP officer is recovering after his patrol car was hit by another vehicle at an intersection on Monday, May 10. (Photo courtesy Julia Rose)
Nanaimo RCMP vehicle broad-sided in crash at Harewood intersection

Police officer recovering at home following collision Monday

A scene from the Schoolhouse Squat from October 2018, where Alliance Against Displacement members and supporters occupied the Rutherford Elementary School site, advocating for people experiencing homelessness. (News Bulletin file)
Two more involved in ‘Schoolhouse Squat’ sentenced in Nanaimo court

Ivan Donald Drury, Tingchun (Listen) Chen get conditional discharges in provincial court in Nanaimo

Gabriola Island’s Kerplunks – Aaron Cadwaladr, Dinah D, Phil Wipper and Jojo Hallett (from left) – perform live from the Port Theatre on May 15. (Photo courtesy Lance Sullivan/Concept Photography)
Nanaimo children’s group the Kerplunks hold first concert in over a year

TheatreOne and the Port Theatre present ‘Upstream with the Kerplunks’

Business owner Jeff Ross outside his shop Gold Silver Guy in Qualicum Beach on May 10. (Mandy Moraes photo)
Gold Silver Guy owner finds Qualicum shop in shambles after break-in and theft

RCMP investigating after door smashed, showcases shattered and inventory stolen

Business owner Jeff Ross outside his shop Gold Silver Guy in Qualicum Beach on May 10. (Mandy Moraes photo)
Gold Silver Guy owner finds Qualicum shop in shambles after break-in and theft

RCMP investigating after door smashed, showcases shattered and inventory stolen

Fraser Health is using ‘targeted’ vaccination clinics in high-risk areas of the Lower Mainland. (Fraser Health photo)
B.C.’s COVID-19 decrease continues, 515 new cases Tuesday

426 seriously ill people in hospital, up from 415 Monday

People are asked to support the Walk for Alzheimer’s by setting a personal walking or fitness challenge throughout May, while fundraising to support Alzheimer Society of B.C. programs and services. (Stock photo)
Nanaimo residents asked to ‘walk their own way’ for Alzheimer’s

Month-long self-paced fitness challenge supports Alzheimer Society of B.C.

The Village on Third in Nanaimo won the Judges’ Choice award as top overall entry at the Vancouver Island Real Estate Board Commercial Building Awards. (Photo submitted)
Nanaimo mixed-use building wins top prize at commercial building awards

Village on Third was Judges’ Choice winner at VIREB Commercial Building Awards

Nanaimo painter Eileen Williamson presents ‘A Little of This….A Little of That’ at Art 10 Gallery until the end of May. (Josef Jacobson/News Bulletin)
Nanaimo artist unveils new body of work after rediscovering motivation

Eileen Williamson presents ‘A Little of This … A Little of That’ at Art 10 Gallery

Next week Nanaimo singer Laura Kelsey is releasing her new single A Foolish Thing and its accompanying music video. (Video still courtesy Greg Nuspel)
Nanaimo singer joined by wolf, dancers in new music video

‘A Foolish Thing’ is Laura Kelsey’s first professionally made single in seven years

Keith MacIntyre - BC Libertarian
Penticton’s Keith MacIntyre new leader of the B.C. Libertarian Party

The Penticton businessman was voted in by members of the party on May 8

RCMP are searching for Philip Toner, who is a 'person of interest' in the investigation of a suspicious death in Kootenay National Park last week. Photo courtesy BC RCMP.
Man sought in suspicious Kootenay death found in Lake Country

Philip Toner is a person of interest in the death of Brenda Ware

Vernon North Okanagan RCMP reported to 287 mental health calls between Jan. 1, 2021, and May 1. (Black Press files)
‘It’s not the police’s responsibility to deal with mental health calls’: Vernon RCMP

RCMP remind public to take care of mental health and well-being, while better solutions are sought

Most Read